On Our Radar

On Our Radar

U.S. Stocks Poised to Open Slightly Higher

Global stocks mostly inched higher Friday, with Wall Street poised to recover from another bout of weakness in the technology sector.

Continue Reading Below

Futures pointed to a 0.1% opening gain for the Dow Jones Industrial Average, putting it on track to notch another record. The tech-heavy Nasdaq had ended down 0.5% Thursday, while the Dow Jones Industrial Average fell 0.1% and the S&P 500 lost 0.2%.

"Tech has done exceptionally well this year," said Yogi Dewan, chief executive at Hassium Asset Management, pointing to signs of solid revenue growth in the sector. "But at these valuations, we're not putting new money into it," he said.

Despite a wobble in some of this year's best performing stocks, equities posted their greatest weekly inflows this year, according to EPFR Global data. Mr. Dewan said pullbacks this year have been short and overall volatility has been low because of the high cash levels he's seen among investors, with many clients waiting for any pullbacks in the market to add to their stock holdings. Fund managers surveyed by Bank of America increased cash in their portfolios in June, bringing their cash allocations well above the historical average.

Elsewhere Friday, Japanese stocks closed higher after the Bank of Japan kept its policy unchanged and sent the yen lower, while the Stoxx Europe 600 was up 0.5% as shares of Nestlé jumped after the Swiss-based consumer giant put its U.S. confectionery business up for sale.

Markets in Europe and Asia also benefited from a recent climb in the dollar, higher oil prices and news of a long-sought Greek bailout deal, analysts said. Yields on 10-year Greek debt fell to 5.577% from 5.772% Thursday after Greece's creditors agreed to release the next tranche of its bailout, but put off a final decision on relieving its debt burden until August 2018. The International Monetary Fund also agreed on new measures for Greece.

Continue Reading Below

ADVERTISEMENT

Greece's default risk looks lower than it has in a while and its economy appears to be showing signs of stability, said Michael Collins, investment officer at PGIM Fixed Income.

Government bonds elsewhere were mostly slightly higher, with 10-year German yields at 0.297% from 0.284% on Thursday and U.S. Treasurys at 2.171% from 2.160%. Yields move inversely to prices.

A recent climb in the dollar also boosted shares of exporters in Europe and Asia, particularly in Japan. The WSJ Dollar Index was flat Friday after climbing significantly following the Federal Reserve's Wednesday meeting, where officials signaled further interest rate rises ahead.

The dollar rose 0.4% against the yen and Japan's Nikkei Stock Average climbed 0.6% after the Bank of Japan said it would maintain its aggressive monetary stimulus as expected. Bank of Japan Governor Haruhiko Kuroda pushed back against calls for details on how the bank might unwind its easing policy.

"We are still not in the condition in which we should be discussing normalization or exit," he said.

The Shanghai Composite Index fell 0.3% even as China's central bank boosted market liquidity by making the largest single-day cash injection into the financial system since mid-January. Investors' focus remained on Anbang Insurance Group, whose chairman was allegedly detained by Chinese authorities.

In commodities, Brent crude oil was up 1.3% at $47.51 a barrel, while gold inched up 0.2% to $1,256 an ounce.